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Kids’ Candy
Estimated U.S. Retail Market Size
$249 million
Kids’ Novelty Non-Chocolate Candy*
$5.7 million
Kids’ Novelty Chocolate Candy* *For calendar year 2007 in food, drug, and mass merchandisers, excluding Wal-Mart Source: Information Resources, Inc.
Some caveats: It should be noted that the IRI numbers
above represent only a small portion of the kids’ candy market for a
variety of reasons. For one, probably only 30-40 percent of kids’
candy sales occur in the FDM channel. For another, IRI’s use of the
term “novelty candy” is neither all-inclusive nor completely
representative of what most industry sources would define as
novelty/interactive confectionery products.
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Category Climate
Non-chocolate is the reigning king of kids’
candy. Here is one sub-segment of confectionery where you just don’t
hear that much about chocolate; it clearly doesn’t have the
ideal/interactive fit that non-chocolate, in its many forms, has. Similar
to last year, chocolate novelty candy is down by significant double-digits
in dollar sales—nearly 32 percent, according to Information
Resources, Inc., which tracks only the food, drug and mass retailers,
excluding Wal-Mart. Meanwhile, kids’ novelty non-chocolate candy
showed modest, but good, comparatively, dollar-sales increases in the 4
percent range, according to IRI.
Researchers say that when the entire category is
considered (and this includes many “alternative” retailers from
outside the mass market), overall dollar sales have been somewhat flat
recently; however, there is good news in SKU growth. New items have been
dubbed the “lifeblood” of the category (thanks to the
unsurprising fact that kids’ tastes are constantly changing and
awaiting the next “it” items); mid-2007 figures show that
kids’ confectionery SKUs grew by almost 25 percent. Innovation is
rampant from typically small, but many, players. That is keeping candy
buyers on their toes and constantly juggling/evaluating new flavors and new
brands. The management of the category has, therefore, been classified as
one of the toughest in confectionery.
Target Audience/Pricing
Except for the occasional candy-addict adult who,
perhaps, is really a kid at heart, the primary target for kids’ candy
is kids, tweens and, typically, younger teens. Parents are a secondary
target, as they are often standing in the candy aisle, too—ready to
say “yay” or “nay” to the treat. Sometimes they
have been known to buy novelty candy for their kids while shopping alone,
wanting to bring home “a little something” that is a fraction
of the cost of a “real” toy. Teachers, too, may stockpile some
novelty candy treats as prizes/awards or for party days. This has spurred
some “nostalgic” novelty candy to be incorporated into the kid
sets—items that remind the adults of candy that was around when they
were young—but usually in a smaller, ancillary way. Teenagers have
also been known to “revert back” to buying candy that reminds
them of their childhood, either for themselves, or perhaps a younger
sibling.
But kids are no spend-slouchers all by themselves; in
fact, they have been shown to have an undeniable and building spending
power, according to a multitude of industry research. For instance, a
recent Harris study reports that American kids, teenagers and young adults
ages 8 to 21 have annual incomes (for kids, this includes allowances and
other “earned” money) totaling $211 billion, and are actually
spending 81.5 percent of it—which rounds out to a nice $172 billion
per year. Alloy Media reports that the tween segment alone is spending $51
billion per year. Futurist Jim Taylor, vice chairman of the Harrison Group,
separates the boys from the girls, proposing that boys under 18 have an
average of $525 to spend each month, while girls of the same age group have
$430.
Kids’ money today is not all small bills and
loose change. Industry research highlights that 22 percent of U.S. teens
have credit cards while in high school. Even more enlightening: Researchers
expect many of these numbers to keep climbing at exponential rates.
Retailing/Merchandising
Category observers say that with all the
innovation—and constant influx of merchandise—retailers who
want to truly profit from kids’/novelty candy should give it a
permanent home, then supplement it with outposts and highlights. This will
require a labor of love for kids and the category, because the true magic
is said to lie in the well-maintained movement of a stable section, which,
obviously, is no easy feat.
But it certainly can be done. The thinking is that if
a retailer has kids in its stores, it should appeal to their impulsive
nature with a kids’ candy set that rotates new items in at least
every 6-12 months; some have said that ideally, at least 50 percent of the
set should be rotated annually, with as much choice as possible.
Then, anchor items as well as topical items such as
movie licenses, can be promoted off-shelf in floor displays to drive
incremental impulse points in the store. Retailers should remember that
this category is not necessarily one of “big brands,” but
rather, one of true innovation. It has been said that with so many smaller
manufacturers spending research and energy on packaging, new concepts,
flavors and textures, a retailer’s job of attracting kid consumers is
largely being handed to them. They then have to run with the ball and
manage the process swiftly.
Seasonal Opportunities
The spring and summer seasons have a strong impact on
novelty candy, especially for retailers that know how to highlight that
from a kids’ perspective. Youngsters may not be in tune to Memorial
Day as a holiday per se, but they do care that it marks the start of the
summer season. Some retailers, therefore, set promotions and outposts
around “Candy Carnival” and “Candy Circus” themes
right around this important category time; some start even earlier in the
spring. Attractive signage that calls attention to a carved-out section is
an important aspect of its success. Making relevant movie tie-ins for the
big summer blockbusters is also key to kid attraction.
Outlook
Some experts believe that eventually there will need
to be a “re-thinking of distribution” on the part of industry
manufacturers in order for products to flow through the system faster. As
the stream of new products increases, it is expected that so, too, will the
strength of the category.
Meanwhile, the challenge for retailers will be to
continually consider the “next great concept.” Some experts
advise candy buyers to use more “kid panels” and focus groups
in helping them decide what to buy. The thinking is that category
plan-o-grams and profit would be much stronger if kids had a real voice in
the selection of the mix.
Ultimately, industry players see a stable future for
both the category and the retailers that truly embraces it as a growth
opportunity.
Quick Bites
Non-chocolate
makes up the lion’s share of the kids’/novelty segment.
With constant sku proliferation, novelty category management is the toughest in confectionery.
Kids have an undeniable (and building) spending power.
A permanent kids’ candy set should be rotated every 6-12 months, with at least 50 percent traded out for new items.
Eventually, improved distribution and more kid involvement could have a very positive impact.
With constant sku proliferation, novelty category management is the toughest in confectionery.
Kids have an undeniable (and building) spending power.
A permanent kids’ candy set should be rotated every 6-12 months, with at least 50 percent traded out for new items.
Eventually, improved distribution and more kid involvement could have a very positive impact.